ISLAMABAD (August 23 2003) : State Bank of Pakistan (SBP) Governor Dr Ishrat Hussain and Securities and Exchange Commission of Pakistan (SECP) Chairman Dr Tariq Hassan resolved to work in close cooperation to build up a strong and effective regulatory framework within the country.
The two institutions would work together to institutionalise the crisis management mechanism.
They were expressing their views in a meeting of the Co-ordination Committee of SBP and SECP held here on Friday.
It was also decided that the ongoing action against brokerage and forex companies carrying out illegal, unauthorised and fraudulent activities would be vigorously pursued.
The meeting, which was held at the SECP head office and senior officials of both the institutions, attended it.
Dr Tariq Hassan, who took over as SECP chairman only a few days back, reiterated that effective enforcement of relevant rules and regulations and regulations and institutional strengthening would be the major area of focus for the SECP as it embarked upon a new era of sustainable development for the capital market and corporate sector in Pakistan.
He assured the governor of SECP's continued cooperation with the SBP in building a strong regulatory framework within the country.
He said that the SECP had come a long way since its inception in 1999 and he would continue the process of developing the regulator.
The SECP chairman also said that the regulatory objectives of the two institutions could only be met through a consultative process with all the stakeholders.
He intended to adopt a participatory approach in fulfilling the mandate of the commission.
The SECP would continue to facilitate investors by promoting an efficient and transparent capital market and corporate sector and engendering confidence and faith in the integrity of the market.
The commission would also be looking into further deepening the market and improving risk management, especially at this time, when the market was performing remarkably well.
SBP Governor Dr Ishrat Husain congratulated the SECP chairman and assured the commission of continued cooperation and facilitation from the bank. He hoped that the SECP would continue to be an effective and efficient regulator under the chairmanship of Dr Hassan.
He also stressed the need to establish easy access to data between the two institutions.
The main areas of discussion at the eighth co-ordination committee meeting between both the institutions included ongoing proceedings against a number of brokerage and forex businesses, margin financing and monitoring of non-bank primary dealers.
On the issue of non-regulated brokerage business, the two regulators agreed that several players in the market were trying to take advantage of the division of regulatory authority between the SECP and the SBP and that the two institutions should continue to work together to ensure that a comprehensive regulatory framework was in place.
It was also decided that both the institutions would make joint efforts to create awareness among the public regarding the legal position of investments with individuals/companies.
The SECP/SBP co-ordination committee meetings are held once a quarter and include high-level officials from both the institutions.
These formal meetings supplement the ongoing regular co-ordination between the two regulators on all the matters of mutual interests.